The City of Vancouver has taken its battle with Airbnb to B.C. Supreme Court — petitioning to stop the nightly rental of a two-bedroom townhome in Fairview Slopes.

The lawsuit targets East West Investments, the company registered as the owner of the unit, as well as Heather Chang, a doctor listed as the company's director. Chang declined comment on the court filing.

The petition cites Vancouver's zoning bylaw as a rationale for prohibiting the rental of a home or apartment for a period of less than one month unless it's part of a hotel or bed and breakfast.

'Elegant 2BR in Fairview'

It's believed to be the first time the city has gone to court to take on the online short-term rental company, which local politicians have claimed is partly responsible for eating into Vancouver's diminished supply of affordable housing.

The B.C. Supreme Court petition claims a Vancouver city employee booked a unit through Airbnb which the city now wants to shut down. (Tina Lovgreen/CBC)

According to the petition, a city employee booked a listing for an "elegant 2BR in Fairview" on Airbnb Sept. 6 for a two-night stay starting the next day.

The reservation confirmation gave the address as an apartment in the 700 block of West 7th Avenue with the host of the premises listed as Flatbook Team, a property management company.

"The city employee had received instructions ... that she would find a lockbox attached to the front gate of the premises and she was given the code to the lockbox in order to access keys to the door," the claim reads.

"The premises was a three-level townhome with two-bedrooms, and items such as towels, toiletries, and cooking utensils were provided."

The petition says the property manager contacted the city employee several times during her stay via text message and email to ensure she hadn't encountered any problems. She checked out of the apartment on Sept. 9.

According to the court documents, the city employee observed the unit listed on Airbnb on three dates after she checked out. The petition says the apartment is still listed as available for periods under one month.

Order to stop short-term rental

The city is seeking an order from the court to force East West Investments and Chang to cease offering the unit for periods of less than one month. The petition also calls for costs.

As a legal basis, the petition cites the zoning and development bylaw that restricts the use of dwelling units for less than one month to hotels and bed and breakfasts.

Vancouver Mayor Gregor Robertson recently proposed new rules that would allow homeowners to get a licence for short-term apartment rentals. (Rafferty Baker/CBC)

The petition also claims that the defendants are contravening a bylaw that requires them to have a business licence.

Airbnb would not comment on the lawsuit itself, but said in an emailed statement that the vast majority of Vancouverites who list properties on the website "do so a few nights each month to earn a modest, supplemental income that helps pay the bills."

Spokesman Christopher Nulty said the company is working with the City of Vancouver.

"Our goal is to ensure a healthy home sharing community for Vancouver and to help the city develop fair and sensible rules that support home sharing," Nulty said.

"We believe we can partner with the city to find the right policy solutions, including addressing any unwelcome commercial operators."

Last month, Vancouver Mayor Gregor Robertson proposed a system that would require people to get a business licence for Airbnb and other short-term rentals. He estimated the move would put up to 1,000 homes back into the long-term rental pool.

The new rules would allow homeowners to get a licence for their principal dwelling, but not for secondary units such as basement suites and laneway homes.

The new rules would not allow the owners of investment properties to get a licence for short-term rentals.

Robertson said short-term rentals may be subject to a tax, which would be used to fund affordable housing initiatives.

City staff are expected to draw up the final regulations by early next year.

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